Costs of dissatisfaction repair costs and warranty costs


MULTIPLE CHOICE

1.Regarding the quality of design, production, and distribution of products, an ethical requirement for management is to 

1.a. determine whether any of the organization's stakeholders are violated by poor quality products 

2.b. gain ISO 14000 certification for the organization 

3.c. obtain a product safety certificate from the Consumer Product Safety Commission 

4.d. have the organization's legal staff write disclaimers in the product instruction booklets 

5.e. compare the cost of product liability to the external failure cost 

2.If 1 million passengers pass through the St. Louis Airport with checked baggage each month, a successful Six Sigma program for baggage handling would result in how many passengers with misplaced luggage? 

1.a. 3.4 

2.b. 6.0 

3.c. 34 

4.d. 2700 

5.e. 6 times the monthly standard deviation of passengers 

3.Which of the following is true about ISO 14000 certification? 

1.a. It is not a prerequisite for ISO 9000 certification. 

2.b. It deals with environmental management. 

3.c. It offers a good systematic approach to pollution prevention. 

4.d. One of its core elements is life-cycle assessment. 

5.e. All of the above are true. 

4.Suppose that a firm has historically been achieving “three-sigma” quality.  If the firm later changes its quality management practices such that begins to achieve “six-sigma” quality, which of the following phenomena will result? 

1.a. The average number of defects will be cut in half. 

2.b. The specification limits will be moved twice as far from the mean. 

3.c. The average number of defects will be cut by 99.9997%. 

4.d. The average number of defects will be cut by 99.87%. 

5.e. The average number of defects will be cut by 99.73%. 

5. To become ISO 9000 certified, organizations must 

1.a. document quality procedures 

2.b.have an onsite assessment 

3.c. have an ongoing series of audits of their products or service 

4.d. all of the above 

5.e. none of the above 

6. Total quality management emphasizes 

1.a. the responsibility of the quality control staff to identify and solve all quality-related problems 

2.b.a commitment to quality that goes beyond internal company issues to suppliers and customers 

3.c.a system where strong managers are the only decision makers 

4.d.a process where mostly statisticians get involved 

5.e.ISO 14000 certification 

7. A successful TQM program incorporates all of the following except

1. a. continuous improvement 

2.b. employee involvement 

3.c. benchmarking 

4.d.centralized decision-making authority 

5.e.none of the above; a successful TQM program incorporates all of the above 

8. "Kaizen" is a Japanese term meaning 

1.a. a foolproof mechanism 

2.b. just-in-time (JIT) 

3.c.  fishbone diagram 

4.d.setting standards 

5.e.continuous improvement 

9. Which of the following statements regarding "Six Sigma" is true? 

1.a. The term has two distinct meanings—one is statistical; the other is a comprehensive quality system. 

2.b.Six Sigma means that about 94 percent of a firm's output is free of defects. 

3.c.The Six Sigma program was developed by Toyota in the 1970's. 

4.d.The Six Sigma program is for manufacturing firms, and is not applicable to services. 

5.e.Six Sigma certification is granted by the International Standards Organization (ISO). 

10. Quality circles members are 

1.a.paid according to their contribution to quality 

2.b.external consultants designed to provide training in the use of quality tools 

3.c.always machine operators 

4.d.all trained to be facilitators 

5.e.none of the above; all of the statements are false 

11.Techniques for building employee empowerment include 

1.a. building communication networks that include employees 

2.b. developing open, supportive supervisors 

3.c. moving responsibility from both managers and staff to production employees 

4.d. building high-morale organizations 

5.e. All of the above are techniques for employee empowerment. 

12.Building high-morale organizations and building communication networks that include employees are both elements of 

1.a. ISO 9000 certification 

2.b. Six Sigma certification 

3.c. employee empowerment

4.d. Taguchi methods 

5.e. the tools of TQM 

13.The process of identifying other organizations that are best at some facet of your operations and then modeling your organization after them is known as 

1.a. continuous improvement 

2.b. employee empowerment 

3.c. benchmarking 

4.d. copycatting 

5.e. patent infringement 

14.ISO 9000 seeks standardization in terms of 

1.a. products

2. b. production procedures 

3.c. suppliers' specifications 

4.d. procedures to manage quality 

5.e. all of the above 

15.Costs of dissatisfaction, repair costs, and warranty costs are elements of cost in the 

1.a. Taguchi Loss Function

2. b. Pareto chart 

3.c. ISO 9000 Quality Cost Calculator 

4.d. process chart 

5.e. none of the above 

16.A quality loss function includes all of the following costs except 

1.a. the cost of scrap and repair 

2.b. the cost of customer dissatisfaction 

3.c. inspection, warranty, and service costs

4. d. sales costs 

5.e. costs to society

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Finance Basics: Costs of dissatisfaction repair costs and warranty costs
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